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Existing literature has widely explored the individual roles of housing and neighborhood quality, and there is limited research examining their interactive effects on mental health. This 3-year cohort study utilized a longitudinal design to investigate the individual and interactive effects of housing and neighborhood quality on mental health among 962 community-dwelling adults in Hong Kong. Participants were asked to rate their residential qualities over the 3-year period. Mental health outcomes, including levels of psychological distress and common mental disorders (CMD), were assessed using the Revised Clinical Interview Schedule (CIS-R). Logistic regression and generalized linear models were used to examine the association between housing and neighborhood quality and CMD/psychological distress, adjusting for sociodemographic and residential characteristics and baseline mental disorders. Housing quality was associated with the 3-year CMD (adjusted OR 0.95; 95% CI 0.91 to 0.98). Likewise, neighborhood quality was associated with CMD over 3 years (adjusted OR 0.92; 95% CI 0.87 to 0.96). In a separate model including both quality measures, the effect of housing quality on CMD was attenuated, whereas the neighborhood impact remained significant (adjusted OR 0.92; 95% CI 0.87 to 0.98). Generalized linear models indicated that for participants residing in substandard housing, those with high neighborhood quality had lower CIS-R scores at follow-up compared to those with low neighborhood quality (p = 0.041). Better neighborhood quality alleviated the detrimental effects of poor housing quality on mental health. Planning for an enhanced neighborhood would improve population mental health in an urban environment. [ABSTRACT FROM AUTHOR]